The U.S. Treasury Department has withdrawn a proposed rule that would lower the information-gathering threshold for cryptocurrency transfers from $3,000 to $250.
The Financial Crimes Enforcement Network (FinCEN), part of the U.S. Treasury Department, and the Federal Reserve Board withdrew the Travel Rule proposal for crypto transactions on Friday. Introduced in 2020, the proposal would have required financial institutions to collect information on transactions of $250 or more; the current threshold is $3,000.
FinCEN cited the passage of more than five years, changes in the crypto sector, and the value of receiving new public comments among its reasons for withdrawing the proposal. The agency also said that any potential new regulations concerning crypto assets should be assessed in light of current developments.
When the proposal was introduced, FinCEN argued that lower-value transactions were increasingly being used to move illicit funds. In response, Coin Center warned that lowering the threshold could bring more ordinary crypto transactions under financial surveillance.
Coin Center also addressed the proposal withdrawn last month that sought to impose reporting and recordkeeping requirements on transactions involving self-hosted wallets. The organization welcomed the withdrawals, arguing that the rules could expand financial surveillance.
Crypto Council for Innovation CEO Ji Hun Kim also said the decision was the right one. Kim said lowering the $3,000 threshold to $250 would place an unnecessary burden on financial institutions, especially for cross-border transfers.
Not investment advice.